Peabody Energy Corp. moved one step closer to emerging from Chapter 11 bankruptcy after the company filed a plan of reorganization and disclosure statement with the U.S. Bankruptcy Court for the Eastern District of Missouri on Dec. 22.
The proposed plan provides for a new capital structure that will significantly reduce the company's pre-filing debt levels by more than $5 billion. The plan also will recapitalize the company through a backstopped rights offering of $750 million, a private placement of mandatorily convertible preferred stock of $750 million and the issuance of new common stock to satisfy certain creditor claims.
Peabody expects to have a hearing on the disclosure statement on Jan. 26, 2017, and is targeting emergence from bankruptcy in the beginning of the second quarter of 2017. The company filed for Chapter 11 bankruptcy protection in April.
The development came a few days after Peabody made an early payment of its bankruptcy financing package.
The plan, which has the support of the company's first-lien creditors, the second-lien group and unsecured noteholder group, includes recoveries for the said key stakeholders and Peabody's emergence as a public company. Moreover, it provides for a nine-member board of directors that will be comprised of the CEO, a director chosen by Peabody, appointments from the three large creditor groups and four directors chosen by a search process.
"While we still have outstanding issues to resolve prior to emergence, this plan demonstrates that Peabody retains an unmatched asset base, leading U.S. platform, substantial Australian thermal and metallurgical coal business, and a team of skilled employees with a fundamental commitment to lasting values," Peabody President and CEO Glenn Kellow said in a statement.
Peabody, which recently reported a net loss of $161.6 million for November, also plans to release to the public updated projections for 2016 through 2021.